Parmalat reaches 'satisfactory' settlement
financial institutions in its ongoing fight to recoup the billions
lost in 2003.
The Italian dairy giant announced last week that the cases involving revocatory and damages actions filed by Parmalat against BNL and Ifitalia have been settled, as have the objections filed in bankruptcy court by Ifitalia.
This brings to an end one of the biggest legal cases associated with the Parmalat scandal.
Parmalat has experienced a spectacular reversal of fortunes since December 2003, when the company defaulted on more than €14 billion in debt.
Under new chief executive Enrico Bondi, the company has followed a strategy to recoup the billions it lost in the financial scandal and two years of Italian government administration.
With Bondi at the helm, Parmalat has worked to stave off efforts by an Italian banking conglomerate to disintegrate the group, and has initiated various legal proceedings in Europe and the US against banks allegedly involved in the fraud.
Bondi's argument is that a number of financial institutions knew about the fraud and were partly responsible. However, the financial institutions involved in the 2003 affair have largely maintained that they were fooled by Parmalat's accounting chiefs.
Under the terms of the settlement, BNL, also acting on behalf of Ifitalia, has committed to pay to Parmalat, €103 million in settlement of revocatory actions plus €9 million in settlement of damages claims.
Furthermore, BNL and Ifitalia have undertaken to forego the right to file claims with the Parmalat case bankruptcy court for a value equivalent to that returned in settlement of the revocatory actions, and have also agreed to renounce to the objections previously filed by Ifitalia in relation to Parmalat's list of creditors.
Following the settlement Parmalat and BNL/Ifitalia have undertaken to withdraw all the pending actions. BNL, Ifitalia and Parmalat each expressed their satisfaction at the settlement.
The legal action is taking place on both sides of the Atlantic. At the end of last year, banks and auditors accused of contributing to Parmalat's €14 billion accounting scandal were ordered by a court in New York to reach a settlement.
